Wednesday, February 28, 2007

Fantasy LaLa Land

After 12 years of fighting for reform, we welcome new calls for expanding health care to the uninsured. But while it's a start, we and a swiftly growing coalition in California and nationwide, believe these steps are the prelude to true universal health care for California residents.

And these new steps are?

Our argument is simple: all plans that expand the business of the private insurance industry are doomed to fail because they won't control costs. How can they when their profits, marketing costs and duplicated, look-alike plans currently waste 30% of every health care dollar they handle in California?

Why is it, lot's of folks talk about 30% admin costs but no one bother to validate that figure. This is almost 3x the figure I have seen in the past with carriers, yet too many accept it as valid.

Governor Schwarzenegger wants to cap the "administrative costs" of the insurance companies at 15%. This is a whopping 12% more than Medicare's 3% administrative cost which is roughly the same as the estimated administrative cost under SB 840 and in the health care systems in virtually every other developed nation!

And no one ever challenges the 3% admin costs for Medicare. For what it's worth, Medicare does not adjudicate or pay claims, they farm that out to the carriers.

You know, the same ones that supposedly charge 30% to administer health plans.

So what does Medicare do for their 3%?

That's a good question.

This next point is a valid one.

Why should we expect everyone to buy health insurance, which is even more expensive than auto insurance, when 25% of the drivers in the state ignore the existing "individual mandate" for auto insurance?

Good question.

The rest of the article is fantasy.
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